Picard would never use a word like evil or call the Borg evil unless it was in that mental period between Best of Both Worlds and First Contact... That's a really long period there son. Point is that he was unnaturally crazy in reference to the Borg then, and Janeway thought he was sane because she's crazy too.

The Borg are not evil.

To be Evil, you have to give a shit.

They're oblivious to the harm they are doing, but this a question of intent and motive.

Their intent is to help people, and their motive is to spread perfection.

They're no worse than any other fanatically religious missionaries.

Remember the Romans?

After they'd conquered your country, killing half of everyone you know, and you were lucky enough not to be a made a slave, if you didn't accept their gods, they would burn your village down and rape everyone in it... But the Borg are evil.

Even if Picard wasn't completely crazy, he could have been joking or trying to scare the cadets so that they would be suitably afraid not to be killed in their first engagement, and Janeway fell for it.